Four funds interested in stake in Israel's Bezeq -media report

Reuters Staff

2 Min Read

JERUSALEM (Reuters) - Four funds are interested in buying control of Bezeq Israel Telecom from holding company Eurocom, which needs to repay bank debt and whose chairman is under investigation for securities fraud, according to a media report.

Financial news website Calcalist said on Monday that British private equity group Apax, Israel’s Brosh Capital Partners and two other foreign funds were preparing separate offers for Eurocom’s 26.3 percent stake in Bezeq. Eurocom, through its subsidiaries, is Bezeq’s biggest shareholder and has control of the company.

Shares in Bezeq, Israel’s largest telecom group, were up 4.5 percent following the report.

Both Apax, which sold a major stake in Bezeq in 2010, and Brosh Capital, declined to comment. Officials at Eurocom also declined to comment.

Bezeq said last week that Eurocom had received letters from banks calling on it to “repay a significant debt”, but did not say how much. Calcalist said the holding company owes 1.2 billion shekels ($342 million).

Eurocom’s chairman, Shaul Elovitch, was replaced as chairman of Bezeq on an interim basis in June in the wake of an investigation into suspected fraud and financial reporting offences involving Bezeq executives. This month Elovitch said he would not be returning to Bezeq.

The Israel Securities Authority said earlier this month that it had found enough evidence to support bringing criminal charges against senior officials. Elovitch has denied any wrongdoing.

Bezeq is not up for sale but the possible charges and pressure from creditors have led many in the industry to expect that Elovitch will be forced to sell his Bezeq stake if charged, Calcalist said.